The percentage of Bitcoins that were sold for a profit compared to those sold for a loss went down to less than 1 for the first time in over two weeks on February 10th.
The claim was made by the data shared by a digital crypto analytics firm Glassnode. The measure known as the Bitcoin Realized Profit/Loss Ratio dropped to 0.9189.
It happened when the value of Bitcoin dropped to a low near $22,000, which is a new low in the past three weeks.
It seems that the loss came after the news that U.S regulators might soon launch a crackdown against U.S-based crypto-staking service companies.
This Loss Is Not Subjected To Staking Service
The fact of the matter is that the recent loss in the currency’s on-chain services sector is the key indicator. It suggests that the rumors that the feds might increase the interest rate can also negatively impact the price of Bitcoin (BTC).
On Thursday, more money was lost in the Bitcoin market compared to what was gained in USD. Before the 5% decrease in one day, Bitcoin’s value had already decreased 5% from its highest point of $24,000.
However, even with these losses, the overall profit still outweighed the losses. The price drop was probably due to people selling the Bitcoin that they bought earlier in the year before or during the big price increase.
The negative Realized Profit/Loss ratio on Thursday suggests that more of the selling was caused by traders.
The traders had bought the stock recently when the price of Bitcoin was $24k. When it dropped down to $22k, they were forced to sell due to losses.
The information about the future sale of positions from Coinglass, a company that analyzes cryptocurrency derivatives, shows a similar trend.
On Thursday, the liquidation of Bitcoin’s long positions reached its highest level in more than three months, totaling $64.6 million.
What is The Future of Bitcoin (BTC) Moving Forward?
As the end of the week approaches, the value of Bitcoin is staying steady above the important $21,500 level which has now become a support.
Traders are curious about whether those who invested for a short period of time and had a low tolerance for risk have sold their shares. Those who had their sell order set at around $22,000 have likely already sold their shares.
Many short-term investors who bought Bitcoin at high prices above $22,000 may have left the market.
Those who bought earlier in the year at prices below $20,000 may still sell and take their profits, which could continue to push down the prices.
It is expected that the value of Bitcoin decreases over the weekend or the next week. If it happens and the realized profit/loss ratio goes back up above 1.0, it means that people are making more profit by selling.
This statement could be considered a negative sign. This is because it suggests that some people who hold the stock for a longer period of time are uncertain about the continuation of the 2023 rally.
Don’t worry, Bitcoin supporters. According to Coinglass, even though the price dropped on Thursday, the funding rate for Bitcoin leverage hasn’t changed and is still slightly positive.
Coinglass states that when funding rates are positive, it means that people who believe the market will go up (bullish) are paying people who believe the market will go down.
Options markets are preparing for a small chance of decreased value in the next week. Many investors believe that the recent decrease in value is not the beginning of a fallback to the lowest level seen in 2022.
If the Consumer Price Index data from the US shows better results than expected next week, it could cause trouble for Bitcoin shortly.
But the real worry for the price of Bitcoin (BTC) will occur if the Feds decided to raise the interest rate. This would send the price of Bitcoin to further decline.